Happy New Year! I have to say it went pretty quickly for me. I know It’s been a while since I posted but I’ve been reading your blogs on and off the last 2 months. I hope you all had a great Holiday Season. I’ve missed writing myself so I hope to get back on the saddle in 2015.
Now I want to share and document my financial progress for 2014. My main goals for the past year were to spend less by reducing my expenses and pay down debt.
My journey into spending less started in the second half of 2013 when I decided to track my spending. Once the numbers came in I committed to reducing my expenses in 3 areas. The results were great so in 2014 I gradually added a few more. Here are the areas in which I reduced my spending.
|Clothes||64%||Stopped going to the mall and buying unnecessary clothing and shoes|
|Eating Out||71%||Implemented a monthly budget of $100/month. In the end we spent $85/month|
|Groceries||16%||Created a weekly Meal Plan, limited my trips to the supermarket, shopped more sales|
|Landscaping||22%||Asked for a discount from my landscaping company|
|Cell Phones||47%||Switched to Prepaid Cellular with Page Plus and Republic Wireless|
|Car Insurance||35%||Switched to Geico|
|Allowance||36%||Packed more lunches for work|
|Cable/Internet||6%||Downgraded to TV Local after my contract ended in October. The Savings will be $65/month so this category will be a huge savings in 2015|
|Home Gas and Electric||13%||Turned down thermostat by 3 degrees|
|No Vacation until credit card is payed off||100%||In 2014 I started travel hacking with reward credit cards. So far I have enough rewards for 2 round trip tickets to Europe, a $500 travel credit and a few nights at a Starwood Hotel. Now it’s time to start planning my 2015 Vacation. Yay!*|
The end result was that I was able to cut $10k from my yearly spending or about $834/month. Amazing what a few small changes can do in a year! The largest savings came from cutting back on Eating Out, Buying Clothes, Allowance, Cell Phone, and Car Insurance. So if you are just starting on your journey into spending less in 2015 I would start with those 5 areas.
In my case, I did not completely eliminate any of these but I was able to reduce my spending in each category. The key to all of this for me was changing my mindset. Once you make the switch from spending to saving it really is easier to adjust to the changes.
Paying Down Debt
With the $10k in savings I payed down part of my credit card debt, replenished my savings, and paid for some unexpected expenses without getting further into debt. I plan on getting rid of all my credit card debt in the first quarter of 2015.
On the Home Front
In 2014 I had 2 emergency home repairs to deal with. The first was replacing our Sump Pump back in early January. The other was a clogged pipe in October. The total repairs for both was $1000. We had saved $2,650 in our Home Emergency Fund so no worries, we just wrote a check.
For 2015 I decided to increase the Home Emergency Fund to $3,000 based on the rule of saving 1% of our home value. That is already fully funded so no worries there.
Financial Goals for 2015
- Payoff credit card debt in first quarter of 2015
- Plan to continue spending less in the categories mentioned above. I project a higher savings rate for 2015 given the fact that now I will be spending less from day one of the new year.
- I’m also going to challenge myself to spending less in my monthly grocery bill. I’m targeting $400/month. Wish me luck!
- Work on increasing my income
That’s all for now. Let the journey begin!
*By the way, I did not carry a balance on my rewards credit cards. I used them to pay for my regular monthly expenses in order to meet the spending requirements and then paid them off in full at the end of the month.
Photo by: www.seniorliving.org